It’s been a difficult journey for the cryptocurrency market through 2022. As of November the market had dropped by 70 percent from its previous high on November 20, 2021. Just when the market was going downhill and down, the FTX crash turned them worse. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. And every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. This growing demand could result in increasing participation in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. As more and more people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing increasing numbers of people are beginning to become aware about and appreciate the concept. As awareness and acceptance grows of crypto, it will lead to more people buying and holding crypto, which could raise prices.
option room crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built on top of blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are beginning to look at crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for people to buy and hold crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, this makes it easier for people to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. With these things in mind, it’s likely that the crypto market could see a recovery in 2023. For those in it for the long haul Being patient and disciplined is crucial.